How much does it cost to start an online store?
There are all kinds of e-commerce sites out there, ranging from simple shop windows for a handful of products to powerful platforms used by thousands of customers. Obviously the bigger and more complex a site is, the more expensive it will be to build and run. The biggest factors affecting the cost of an online store are the number of products, the available features, and the underlying infrastructure. Let’s take a closer look at the different costs and what you need to consider.
- Costs involved in setting up an online store
- Choosing the right system
- Setting up an online store: software types and costs
- Online stores: a comparison of features and costs
- What other costs are involved in creating an online store?
- Summary: how much does it cost to start an online store?
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Costs involved in setting up an online store
To successfully sell products online, you need the right software, and this is a significant factor when it comes to calculating the cost of an online store. When looking for a solution, it’s important to think about your specific requirements, and in particular the following factors:
The design of your online store
Are you happy with a classic design with a simple header, navigation bar, filters, and product pages? Or do you want to be able to customize specific features? If you want a custom design, you’ll need to pay an agency or freelancer to create your site, and you also need to make sure the software you pick is compatible with the design.
Features and functionality
Even the simplest, cheapest e-commerce solutions come with basic features like a navigation system, filters, and a shopping cart. If you want more than this, however, you’ll need a more powerful (and often more expensive) solution, or you might have to hire a developer to design and develop the additional features. The most complex and expensive sites are those that include a product configurator that lets customers customize their order.
What do you want to sell?
Will you be selling 10 products or 1,000? Are you going to have to write product descriptions and take photos yourself (for example, if you’re selling homemade products, or can you get all of this from the manufacturer?
People often underestimate the cost of creating content for an online store. You’ll need at least one good photo of each product – probably more. You’ll also need compelling product descriptions and detailed information (known as master data and attributes) for each item. Some sellers prefer to hire a freelancer or specialized agency to create content for their site. Agencies can offer quicker turnaround times and high quality as they usually have a whole team of content experts on hand.
If you’re selling a lot of products, outsourcing content creation can save you time and money, although costs do vary a lot (depending on quality requirements). Of course, if you’re selling another company’s products rather than you own and can get all the necessary content from the manufacturer, the costs will be lower.
The number of products and type of content don’t directly affect what online store system you can use, but they do affect the following two factors – both of which have implications for the cost of your online store. Let’s take a closer look.
Product data management
Many store systems allow you to manage and update your photos, product descriptions and other data directly in the backend. However, if you’ve got a lot of content to manage, it might make more sense to import it as a CSV file or connect a database, such as an Enterprise Resource Planning (ERP) system.
Support for multiple languages
Are you going to be selling your products overseas? If so, you’ll need to create and store content in several languages. And in fact, even if all your customers are in English-speaking countries, you might still want to create different versions for the UK, the USA, Australia, New Zealand and so on. Make sure that whatever software you choose lets you configure different languages.
Payment and shipping options
Some online store solutions come with built-in options for online payments, invoicing and shipping. Alternatively, you’ll need to use external apps or plugins to handle aspects like checkout and shipping.
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Choosing the right system
It should now be clear that the level of customization you require is a key factor in determining what solution works for you and how much it will cost to set up your online store. The cheapest option is of course a standard off-the-shelf solution. The second key factor when it comes to cost is how many products you want to sell.
If you’re unsure about either of these points, it might be worth consulting an expert. Both agencies and freelance consultants can help you work out how much it will cost to build an online store and select the best software. They can also advise on how to set up your online store and help with running it further down the line. Independent consultants usually charge an hourly rate, starting at around $100. For advice on choosing a system and a cost estimation, you should allow for at least two days.
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When choosing software, you’ll want to think about scalability too. Lots of people start small, and that’s great. But it’s good to plan for the future too. Perhaps you’ll want to branch out into other sectors, expand your customer base or customize certain features, for example. To avoid unnecessary hassle, choose a solution that you can easily upgrade when the time comes.
Setting up an online store: software types and costs
If you want to open an online store, you basically have three options:
- An online store builder or ready-made online store which you rent on a monthly basis;
- A flexible open-source solution, many of which have a basic free version; or
- A proprietary e-commerce platform or enterprise solution, available through a licensing agreement.
SaaS solutions and website builders for online stores
Online store builders and rented solutions are ideal for small business owners with limited web expertise. The software is designed to be user-friendly and comes with a range of basic features, and there’s usually a support team on hand to help with any questions. As well as the actual store, the package often includes a domain and/or a standard website and hosting. The cost of this type of solution starts at around $30 per month, plus any content creation and setup costs.
The IONOS eCommerce Website Builder is an easy way to build an online store.
Open-source solutions for online stores
Open-source solutions are a popular choice for small- and medium-sized stores that require a certain degree of customization in terms of design and features. One of the most popular options is to run an online store on a WordPress site using a plugin such as WooCommerce or Shopify. Open-source solutions are usually free or very cheap, but you’ll pay extra for plugins and additional features. On the other hand, you get a lot of freedom when it comes to design and customization.
It’s difficult to calculate all the different costs in advance, but for a medium-sized store you can expect to pay a few thousand dollars in initial costs (design, configuration, content, and so on). Running costs on the other hand are very low, or sometimes even non-existent.
IONOS offers WooCommerce hosting packages starting at just $3 per month for the first year, then $4 per month after that.
Proprietary e-commerce software for online stores
This kind of software is aimed at big companies running large-scale e-commerce websites, i.e., brands with an extensive product portfolio, huge customer database, and/or complex system requirements such as inventory management and shipping software or a returns portal. OXID eShop and Magento are both popular choices. In terms of price, at the lower end of the scale you have Shopware, and at the top end SAP Hybris Commerce.
Different providers offer different payment models – for some you pay a one-off fee to purchase the software, and for others you pay a monthly licensing fee. Entry-level packages start at a few thousand dollars, but for the most powerful solutions, you can easily pay upwards of $20,000 – and remember, this doesn’t include setup or content creation costs!
Online stores: a comparison of features and costs
Store builders and SaaS solutions
Proprietary e-commerce software
IONOS eCommerce Website Builder
Magento, OXID eShop, Shopware
Beginners and advanced users
Advanced users and pros
Requires programming skills?
Degree of customization
Additional features (e.g. stats, reports, multi-language support)
From approx. $30, plus setup and content creation costs
Free, plus cost of plugins, setup and content creation
From a few thousand dollars to $20,000, plus setup and content creation costs
For a comprehensive overview of the different solutions available and their main advantages and disadvantages, check out our e-commerce platform comparison.
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What other costs are involved in creating an online store?
We’ve talked about how much it costs to create an online store, configure it, and create content, but what other costs do you need to consider?
If you don’t use a ready-made template, design costs for a site and all its sub-pages can quickly escalate, reaching several thousand dollars.
Even if you’re just starting out in the e-commerce world, you might want to invest in advanced features from the word go. Bear in mind that purchasing, setting up, and connecting external systems for inventory management, checkout, shipping, marketing, customer service and so on can be very expensive. Software packages for inventory management and shipping alone can cost anywhere from a few hundred dollars to more than $30,000. The more expensive options include features like invoice generation, reminders, and tools to manage product and customer data.
Storage and shipping
If you’re producing and shipping products yourself, you’ll also need suitable storage facilities and packaging materials, and you may need to hire staff. Alternatively, you can arrange for this to be done by a fulfillment company or dropshipping provider.
Anyone running an online store also needs to consider search engine optimization, ads, and other online marketing strategies. Depending on your target audience, needs and budget, you might be able to handle marketing yourself, or you might want to outsource this to a freelancer or agency.
Maintenance and running costs
Whether you’re running your store alone or with the help of a consultant or agency, there is always something to be done, whether that’s adding new product data or features or fixing bugs. Make sure you budget enough time – and money – for this from the outset, especially if you’re a beginner. You can always adjust things later on when you have more experience.
HR costs: will you outsource anything?
Another decision you’ll need to make that affects costs is whether you’re going to run your store by yourself or with the help of a freelancer or an agency. Here are a few things to think about:
- If you’re tech-savvy, you can deal with some of the programming, design, and content yourself, and then hire a freelancer to do the remaining tasks. Alternatively, you could hire someone to take on the whole project and just act as a coordinator yourself.
- Freelancers often charge less than agencies and can provide a one-to-one service for as long as you need.
- If you need the help of several different experts, it might be better to go to an agency as they’ll be able to pull together a team and coordinate things for you.
- You could of course recruit your own team to build and run your store, but don’t forget that recruiting and managing staff will take time and money.
Summary: how much does it cost to start an online store?
There’s no one answer to that question. The exact cost will depend on what system you choose, how many products you’re selling and what kind of features you require. Nonetheless, here are some ballpark figures as a rough guide:
For a small store selling no more than 100 products, if you use a free store builder or an inexpensive open-source solution with basic features, only accept domestic orders, and ship everything from your own office (or living room), you’ll probably pay a few thousand dollars.
For a customizable open-source solution that can handle a much larger product selection and comes with advanced features like a product configurator and an inventory management system, and if you’ve got to create new content, be prepared to pay at least $15,000.
And if you decide to go all out with proprietary software and choose to outsource content production, inventory management and logistics, you’ll need at least $60,000, although there’s really no upper limit for this kind of solution.